President Obama in a meeting with House Speaker John Boehner, R-Ohio. / Carolyn Kaster, AP

by David Jackson, USA TODAY

by David Jackson, USA TODAY

The Obama administration appears to be launching something of a public relations campaign to promote its approach to avoiding the so-called fiscal cliff.

In both a report and an appearance in the White House, a top economic adviser to President Obama said Monday that failing to strike a budget deal before the end of the year would raises taxes on middle-class Americans and reduce their purchasing power -- both threatening economic recovery.

"That's a substantial hit for retailers," said Alan Krueger, who chairs the president's Council of Economic Advisers.

Krueger, as has Obama, called on Congress to renew the George W. Bush-era tax cuts for middle-class Americans, while letting them expire for Americans who make more than $250,000 a year.

Expect a similar message in the days ahead from Obama himself, who made higher taxes on the wealthy a major part of his re-election campaign. Obama has said that reducing the nation's $16 trillion-plus federal debt requires a "balanced" plan that involves higher taxes on the rich as well as budget cuts that might affect the middle class.

"We are always looking for ways to engage the public in a debate like this," said White House spokesman Jay Carney.

The end-of-the-year fiscal cliff includes a series of tax cuts due to expire, as well as automatic spending cuts that would kick in unless the parties reach an agreement on reducing the nation's debt.

Congressional Republicans have said they support the prospect of higher tax revenues, but only through elimination of certain tax breaks. They oppose the raising of income tax rates that would occur with the expiration of the Bush tax cuts for the wealthy.

"We've been open to revenue by closing loopholes, as long as it's tied to spending cuts and pro-growth tax reform that broadens the base and lowers rates," said Senate Minority Leader Mitch McConnell, R-Ky.

As negotiations move forward, Obama and congressional leaders from both parties will also be playing an inside game.

Over the weekend, Obama spoke by phone with House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev.; Obama is expected to meet soon with them and other congressional leaders from both parties.

"He will meet with them at the appropriate time," Carney said.

A Council of Economic Advisers (CEA) report, co-authored by Krueger, issued several dire warnings about the fiscal cliff:

â?¢ Allowing the middle-class tax rates to rise and failing to patch the Alternative Minimum Tax (AMT) could cut the growth of real consumer spending by 1.7 percentage points in 2013. This sharp rise in middle-class taxes and the resulting decline in consumption could slow the growth of real GDP by 1.4 percentage points, which is consistent with recently published estimates from the Congressional Budget Office.

â?¢ Faced with these tax hikes, the CEA estimates that consumers could spend nearly $200 billion less than they otherwise would have in 2013 just because of higher taxes. This reduction of $200 billion is approximately four times the total amount that 226 million shoppers spent on Black Friday weekend last year. As Figure 5 shows, this $200 billion reduction would likely be spread across all areas of consumer spending.

â?¢ American consumers are the bedrock of our economy, driving more than two-thirds of the overall rise in real GDP over 13 consecutive quarters of economic recovery since the middle of 2009. And as we approach the holiday season, which accounts for close to one-fifth of industry sales, retailers can't afford the threat of tax increases on middle-class families.